INDIANAPOLIS, Jan. 18, 2011 /PRNewswire/ -- USA Funds®, a nonprofit organization that helps American families benefit from postsecondary education, encourages families that paid college expenses during 2010 to consider if they qualify for higher education tax credits and deductions when they file their federal income tax returns.
"Congress last month extended or renewed several education-related federal income tax benefits to help families that paid tuition and other college costs," said Carl C. Dalstrom, USA Funds president and CEO. "Taxpayers who paid college expenses last year should check to see whether they qualify for higher education credits and deductions as they prepare their federal income tax returns."
Among the higher education tax benefits are the following items:
American Opportunity Tax Credit. Taxpayers may be able to reduce their federal income tax by as much as $2,500 per student for out-of-pocket tuition, fees and qualified books, supplies and equipment for each of the first four years of study toward a postsecondary degree or certificate.
Lifetime Learning Credit. Families that paid qualified tuition and related expenses for any year of postsecondary education may qualify for a tax credit of up to $2,000.
Student Loan Interest Deduction. Taxpayers may be able to reduce their taxable income by up to $2,500 for qualified interest that they paid on student loans during the tax year.
Deduction for Higher Education Expenses. Taxpayers may qualify to reduce their taxable income by up to $4,000 for qualified tuition and related expenses paid during the tax year.
Employer-Provided Education Benefits. Employees may be able to exclude from their taxable income up to $5,250 in higher education assistance provided by their employer.
To help make families aware of these higher education tax benefits, USA Funds offers a summary of the provisions on its website at www.usafunds.org/borrowers/Pages/TaxBenefits.aspx.
USA Funds advises taxpayers to consult a qualified tax adviser or the Internal Revenue Service at www.irs.gov to determine their eligibility for any of these tax benefits.
Headquartered in Indianapolis, USA Funds is a nonprofit corporation that works to enhance postsecondary education preparedness, access and success by providing and supporting financial and other valued services. For more information about USA Funds, visit www.usafunds.org.
SOURCE USA Funds